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(1)	To elect the ten director nominees named in the proxy statement, each for a term expiring at the next Annual Meeting of Stockholders or until their successors are duly elected and qualified;

(2)	To ratify the selection of KPMG LLP as our independent registered public accounting firm for 2017;

(3)	To hold an advisory vote on executive compensation;

(4)	To hold an advisory vote on the frequency of the advisory vote on executive compensation;

(5)	To approve the AutoNation, Inc. 2017 Employee Equity and Incentive Plan; and

(6)	To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements of the Annual Meeting.

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Proxy Access. In December 2016, the Board amended and restated our bylaws to implement “proxy access.” Our bylaws permit a stockholder, or a group of up to 20 stockholders, who has owned 3% or more of our common stock for at least three years to nominate and include in our proxy materials director candidates representing up to the greater of two individuals or 20% of the Board, provided the stockholder(s) and the nominee(s) satisfy the requirements and conditions specified in our bylaws. See “Stockholder Proposals and Nominations for the 2018 Annual Meeting” below.

•	Majority Voting with Resignation Policy for Uncontested Director Elections. Our Guidelines provide that an incumbent director who fails to receive a majority vote in an uncontested election shall tender his or her written resignation to the Chairman of the Board for consideration by the Corporate Governance and Nominating Committee.

•	Lead Independent Director. Under our Guidelines, if our Chairman of the Board is not an independent director, the independent directors shall annually select one of the independent directors to serve as the lead independent director with specified responsibilities. See “Role of the Board and Board Structure” below.

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Recoupment Policy. In February 2015, the Board adopted the AutoNation, Inc. Policy Regarding Recoupment of Certain Incentive Compensation. Under the policy, if a covered officer engages in fraud, intentional misconduct, or gross negligence, and as a result, we are required to restate our financial statements due to material noncompliance with any financial reporting requirement, then we may require reimbursement or forfeiture of all or a portion of any excess incentive compensation paid to or received by such officer, during the three-year period preceding the date on which we are required to prepare the restatement, that would not have been paid or received under the specific terms of the applicable incentive award had the financial results been originally reported as set forth in the restatement. See “Compensation Discussion and Analysis - Policy Regarding Recoupment of Certain Incentive Compensation” below.

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Stock Ownership Guidelines; Holding Requirement. Our non-employee directors and executive officers are subject to robust stock ownership guidelines. In January 2017, the Board amended our executive stock ownership guidelines to provide that a covered executive is expected to retain 50% of any shares of our common stock, net of applicable tax withholding and the payment of any exercise or purchase price (if applicable), he or she receives upon the vesting or settlement of any equity awards or the exercise of any employee stock options, until the applicable threshold under the guidelines is met. See “Board Compensation - Director Stock Ownership Guidelines” and “Compensation Discussion and Analysis - Executive Stock Ownership Guidelines” below.

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•	Our Guidelines provide for the selection of a Lead Independent Director whenever the Chairman of the Board is not an independent director.

•	Our independent directors meet in regularly scheduled executive sessions led by our Lead Independent Director without management present.

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Our Board is stockholder-oriented and focused on the best interests of our stockholders (approximately 20% of our common stock is held by our directors or entities or persons related to our directors (as of February 21, 2017)), a significant portion of our director’s compensation is equity-based, and the Board has established strong director stock ownership guidelines requiring each non-employee director to hold shares of our common stock having a fair market value of not less than $750,000 as discussed below under “Board Compensation.”

•	Our Board has adopted strong and effective corporate governance policies and procedures to promote the effective and independent governance of the Company. See “Corporate Governance Guidelines and Codes of Ethics” and “Corporate Governance Highlights” above.

•	The combined role enables decisive leadership, ensures clear accountability, and fosters alignment on corporate strategy.

•	Our independent directors annually review the performance of our Chairman and CEO.

•	The Board believes that it functions well with its current leadership structure and with Mr. Jackson as Chairman of the Board and Michael Larson as our Lead Independent Director.

•	At our 2009, 2010, 2012, 2014, and 2016 Annual Meetings of Stockholders, stockholder proposals to amend our bylaws to require an independent Board chairman were presented, and 86%, 85%, 84%, 72%, and 76% of the votes cast, respectively, voted against such proposals.

•	calling and presiding at executive sessions of the non-management Directors and at meetings of the Board at which the Chairman is not present, and communicating feedback from such sessions and meetings to the Chairman and the CEO;

•	serving as a liaison between the non-management Directors, the Chairman and the CEO, and/or senior management (as applicable);

•	reviewing and advising on Board meeting agendas, schedules, and materials;

•	working with the Chairman and the CEO to approve the scope, quality, quantity, and timeliness of information sent to the Board;

•	being available for communication with major stockholders, in coordination with the Chairman and the CEO; and

•	performing such other duties as the Board may from time to time delegate.

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•	our Board must affirmatively determine that a director has no material relationship with the Company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company); and

•	a director must not have a disqualifying relationship, as set forth in the NYSE listing standards.

•	accept directly or indirectly any consulting, advisory, or other compensatory fee from the Company or any of its subsidiaries other than their director compensation, or

•	be an affiliated person of the Company or any of its subsidiaries.

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•	the source of compensation of each such director, including any consulting, advisory, or other compensatory fee paid by the Company to him or her, and

•	whether he or she is affiliated with the Company, a subsidiary of the Company, or an affiliate of a subsidiary of the Company.

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•	ensure alignment with long-term stockholder interests;

•	ensure we can attract and retain outstanding directors who meet the criteria outlined under “Director Selection Process” above; and

•	recognize the time commitments necessary to oversee the Company.

•	eliminated the annual committee retainers previously paid to non-Chair members of the Board’s committees; and

•	modified the non-employee director annual equity award to provide for an annual award of restricted stock units based on a fixed dollar value of $250,000.

•	annual Board retainer of $50,000 for each non-employee director;

•	annual retainer of $25,000 for the Lead Independent Director;

•	annual committee retainers of $20,000 for the Chair of the Audit Committee and $10,000 for the Chair of each of the Compensation, Corporate Governance and Nominating, and Finance Committees;

•	annual award of restricted stock units based on a fixed dollar value of $250,000 as described further below; and

•	expense reimbursement in connection with Board and committee meeting attendance.

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(1)	The amounts reported in this column reflect the grant date fair value of awards computed in accordance with FASB ASC Topic 718. On January 4, 2016, each non-employee director then serving received a grant of 4,259 vested RSUs under the 2014 Director Plan. The grant date fair value of each RSU granted on January 4, 2016 was $58.69, the closing price per share of our common stock on such date.

(2)	Mr. Brown did not stand for re-election to the Board at the 2016 Annual Meeting of Stockholders of AutoNation, Inc., and his Board retainer was prorated accordingly.

(3)	Amount deferred under the DCP.

(4)	Ms. Francis joined the Board in February 2016, and her Board retainer was prorated accordingly.

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(1)	The fair market value of the shares is based on the closing price of our common stock on February 21, 2017 ($48.27).

(2)

In the event that a director meets the threshold and subsequently the fair market value of such director’s holdings falls below the threshold solely due to a decline in our stock price, such director shall be deemed to remain in compliance with the guidelines so long as such director does not sell or transfer any shares at any time the fair market value of his or her holdings is at or below the threshold.

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(1)	Based on 100,920,153 shares outstanding at February 21, 2017.

(2)

Based on a Schedule 13D/A filed with the SEC on November 1, 2016, the number of shares beneficially owned by Mr. Gates as of February 21, 2017 includes 18,431,162 shares held by Cascade Investment, L.L.C. (“Cascade”) and 1,898,717 shares held by the Bill & Melinda Gates Foundation Trust (the “Trust”). All shares of our common stock held by Cascade may be deemed to be beneficially owned by Mr. Gates as the sole member of Cascade, and all shares of our common stock beneficially owned by the Trust may be deemed to be beneficially owned by Mr. Gates as a co-trustee of the Trust. Mr. Gates has sole voting power with respect to 18,431,162 shares and shared voting power with respect to 1,898,717 shares. The address of Cascade is 2365 Carillon Point, Kirkland, WA 98033, and the address of the Trust is 500 Fifth Avenue North, Seattle, WA 98119.

(3)	Includes ESL Partners, L.P. (“Partners”), RBS Partners, L.P. (“RBS”), ESL Investments, Inc. (“Investments”), The Lampert Foundation (the “Foundation”), and Edward S. Lampert. Partners, RBS, Investments, the Foundation, and Mr. Lampert are collectively referred to as the “ESL Entities.”

(4)

Based on a Schedule 13D/A filed with the SEC on January 4, 2017 and a Form 4 filed with SEC on January 30, 2017, the total number of AutoNation shares beneficially owned by the ESL Entities consists of 4,933,706 shares held by Partners, 212,928 shares held by the Foundation, and 11,490,959 shares held by Mr. Lampert. Each of Partners, RBS, and Investments has sole voting and dispositive power with respect to 4,933,706 shares and shared dispositive power with respect to 11,490,959 shares; the Foundation has sole voting and dispositive power with respect to 212,928 shares; and Mr. Lampert has sole voting power with respect to 16,637,593 shares, sole dispositive power with respect to 5,146,634 shares, and shared dispositive power with respect to 11,490,959 shares.

(5)	Based on a Schedule 13G/A filed with the SEC on February 9, 2017, The Vanguard Group has sole voting power with respect to 102,075 shares, shared voting power with respect to 12,285 shares, sole dispositive power with respect to 6,297,213 shares, and shared dispositive power with respect to 111,732 shares.

(6)	Based on a Schedule 13G/A filed with the SEC on February 13, 2017, Capital Research Global Investors has sole voting and dispositive power with respect to 6,000,000 shares.

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*	Less than 1%.

(1)	Based on 100,920,153 shares outstanding at February 21, 2017.

(2)

Includes 753,164 shares that may be acquired upon exercise of vested options, and 773,060 shares underlying unvested options since Mr. Jackson is eligible for retirement treatment under the Company’s equity compensation plans. All options held by Mr. Jackson are owned by a trust of which he is the sole trustee and beneficiary. Mr. Jackson disclaims beneficial ownership of 367,652 shares underlying unvested options, which options he has agreed to transfer in the future pursuant to a transaction that will be exempt from Section 16 of the Exchange Act pursuant to Rule 16a-12 promulgated thereunder.

(3)	Includes 5,000 shares that may be acquired upon exercise of unvested options that would accelerate in the event of termination of Board service and 14,332 vested restricted stock units.

(4)	Represents vested restricted stock units.

(5)	Includes 5,000 shares that may be acquired upon exercise of unvested options that would accelerate in the event of termination of Board service and 16,832 vested restricted stock units.

(6)	Includes 3,750 shares that may be acquired upon exercise of unvested options that would accelerate in the event of termination of Board service and 16,832 vested restricted stock units.

(7)	Represents unvested shares of restricted stock.

(8)	Includes 2,190 unvested shares of restricted stock.

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(9)	Includes 33,000 shares owned by Mr. Ferrando and his wife as tenants by the entirety.

(10)	Includes 12,805 unvested shares of restricted stock.

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•	reviewing our director compensation program and suggesting changes in director compensation to the Board, if appropriate;

•	reviewing and approving the compensation of our CEO and other senior executive officers and setting annual and long-term performance goals for these individuals;

•	reviewing and approving the compensation of all of our corporate officers;

•	reviewing the Company’s program for management development and succession planning;

•	reviewing and approving performance-based compensation of executive officers as contemplated under Section 162(m) of the Code, including incentive awards and stock-based awards; and

•	administering our equity compensation plans.

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•	base salary;

•	annual incentive award; and

•	long-term incentive compensation in the form of stock-based awards.

(1)	50% of target payout level.

(2)	200% of target payout level.

(3)	81.25% of target payout level.

(4)	There was no maximum for the adjusted operating income as a percentage of gross margin metric under the AOP. Each 0.1 percentage point change in this performance metric represented a plus or minus 1.875% payout versus target.

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(1)

The maximum payout level for the adjusted operating income per basic share metric was 200% versus target. While there was no maximum for the adjusted operating income as a percentage of gross margin metric, the maximum amount payable to any one participant in any one year is $5,000,000 under the Executive Incentive Plan. Each 0.1 percentage point change in the adjusted operating income as a percentage of gross margin metric represented a plus or minus 1.875% payout.

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(1)	Includes common stock beneficially owned by each executive and excludes shares underlying stock options and unvested restricted stock.

(2)	The value of the shares is based on the closing price of our common stock on February 21, 2017 ($48.27).

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(1)

The amounts reported reflect the aggregate grant date fair value of each award computed in accordance with FASB ASC Topic 718 for each year shown in the table. For a description of the assumptions used in the calculation of these amounts, see Note 10 of the Notes to Consolidated Financial Statements in our Annual Reports on Form 10-K for the years ended December 31, 2016, 2015, and 2014, respectively.

(2)	The amounts reported represent amounts paid under the Executive Incentive Plan for Messrs. Jackson, Berman, and Ferrando and Ms. Miller, in each case in respect of the year shown. For Ms. Parlapiano, the amounts reported represent amounts paid under the Executive Incentive Plan for 2016 and under the AOP for 2015.

(3)

The amounts reported for personal usage by Mr. Jackson of corporate aircraft are calculated based on the aggregate incremental cost to the Company. Such incremental cost to the Company is calculated based on the direct operating costs to the Company, including fuel costs, crew fees and travel expenses, trip-related repairs and maintenance, landing fees, and other direct operating costs. The amounts reported for personal usage of cars are based on imputed income attributable to each named executive officer calculated in accordance with Treasury regulations, which amounts we believe are equal to or greater than our incremental costs of providing such usage. In addition to the perquisites and other benefits identified in the footnotes below, our named executive officers also are eligible to use our on-site fitness facility, and from time to time, use our tickets for sporting and entertainment events for personal purposes, and receive occasional secretarial support with respect to personal matters.

(4)	Includes amounts that are subject to the terms of the Deferred Bonus Program established for Mr. Jackson. See “Compensation Discussion and Analysis - Annual Incentive Awards.”

(5)	Includes $39,374 for personal usage of corporate aircraft, $45,000 for a vehicle allowance, and $23,464 for group term life insurance premiums, as well as the cost of a Company paid executive health examination.

(6)	Includes $40,408 for demonstrator vehicle usage and a vehicle allowance.

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(7)	Includes $38,341 for demonstrator vehicle usage, as well as the cost of a Company paid executive health examination.

(8)	Includes $36,709 for demonstrator vehicle usage, as well as a nominal service award.

(9)	Includes $11,250 earned in the form of supplemental salary pursuant to the Brand Champions Program and related compensatory arrangement established for 2015 and described in our 2016 proxy statement. The compensatory arrangement established for the Brand Champions Program was discontinued for 2016.

(10)	Includes $15,600 for vehicle allowance.

(1)	$5,000,000 is the maximum allowable award under the Executive Incentive Plan.

(2)	Amounts reported in this column are based on the grant date fair value of awards computed in accordance with FASB ASC Topic 718.

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(1)	Stock options and shares of restricted stock vested or will vest in 25% annual increments on each of the first, second, third, and fourth anniversaries of June 1 of the year in which they were granted for awards granted prior to 2016 and March 1 of the year in which they were granted for awards granted in 2016.

(2)	All options held by Mr. Jackson are owned by a trust of which he is the sole trustee and beneficiary. Options transferred by Mr. Jackson during 2016 and in previous years pursuant to transactions that were exempt from Section 16 of the Exchange Act pursuant to Rule 16a-12 promulgated thereunder are not shown in the table.

(3)	Based on the closing price per share of our common stock on December 30, 2016 ($48.65).

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(1)	These amounts are not included in the “Summary Compensation Table.”

(2)	Amount reflects the portion of Mr. Jackson’s non-equity incentive plan compensation for 2016 that was subject to the terms of the Deferred Bonus Program (included in the “Non-Equity Incentive Plan Compensation” column for

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(3)	Amounts are included in the “Salary” column for 2016 in the “Summary Compensation Table,” except for $57,097 for Mr. Ferrando which is reported in the “Non-Equity Incentive Plan Compensation” column for 2015 in the “Summary Compensation Table.”

(4)	Amounts represent 2016 matching contributions under the DCP, which were credited by the Company as of January 3, 2017.

(5)	$80,023 of this amount has been previously reported as compensation in the “Summary Compensation Table” for 2015.

(6)	$12,500 of this amount has been previously reported as compensation in the “Summary Compensation Table” for 2015.

(7)	Amount, other than (a) contributions reported in the “Executive Contributions in Last Fiscal Year” and “AutoNation Contributions in Last Fiscal Year” columns and (b) gains or losses not required to be reported in the “Summary Compensation Table,” has been previously reported as compensation in the “Summary Compensation Table” for previous years.

(8)	$4,002 of this amount has been previously reported as compensation in the “Summary Compensation Table” for 2015.

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•	No Single Trigger Acceleration of Awards upon a Change in Control. Awards will not accelerate upon the occurrence of a change in control unless the awards are not assumed by an acquirer.

•	No Discounted Options. Stock options may not be granted with exercise prices lower than the fair market value of the underlying shares on the grant date.

•	No Repricing, Reloads, or Repurchases. The terms of the 2017 Plan prohibit the repricing of options or stock appreciation rights, including the cancellation or repurchase of an underwater option or stock appreciation right in exchange for cash. The terms of the 2017 Plan also prohibit the grant of an award with a reload feature.

•	No Share Recycling for Net Exercise or Tax Withholding. Shares surrendered or withheld to pay either the exercise price of an award or to withhold taxes in respect of an award do not become available for issuance as future awards under the 2017 Plan.

•	Minimum Vesting and No Discretionary Authority to Accelerate Awards. All awards (except for 5% of the shares reserved under the 2017 Plan) will be granted with a minimum vesting period of at least 12 months and the Board has no discretionary authority to accelerate awards other than in the case of retirement, death, disability, or a change in control.

•	No Evergreen Provision. There is no evergreen or automatic replenishment provision pursuant to which the shares authorized for issuance under the 2017 Plan are automatically replenished.

•	No Automatic Grants. The 2017 Plan does not provide for automatic grants to any participant.

•	Clawback. Awards under the 2017 Plan are subject to any compensation recovery policies of the Company.

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Stock Ownership Guidelines; Holding Requirement. As more fully described under “Compensation Discussion and Analysis - Executive Stock Ownership Guidelines,” the Board has established stock ownership guidelines for our Chief Executive Officer, President, and each Executive Vice President. These guidelines provide that until a covered executive meets the applicable threshold, he or she is expected to retain 50% of the shares, net of applicable tax withholding and the payment of any exercise or purchase price (if applicable), received upon the vesting or settlement of the equity awards or the exercise of stock options.

•

Historical Burn Rate. The historical burn rate is equal to the number of shares subject to equity awards granted during a period, assuming the target payout for performance units, in proportion to the Company’s outstanding shares as of the beginning of the fiscal year. The Company’s burn rate for fiscal year 2016 was 1.0%, and the Company’s three-year average burn rate for fiscal years 2014 through 2016 was 1.0%.

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•	Overhang. The Company’s overhang is the number of shares subject to equity awards outstanding at fiscal year-end plus the number of shares available for future grants in proportion to the Company’s shares outstanding at fiscal year-end. As of the end of fiscal year 2016, the Company’s overhang was 8.9%.

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Options. An “option” is the right to purchase shares of stock at a specified purchase price. An option intended to constitute an incentive stock option within the meaning of Section 422 of the Code will qualify as an incentive stock option only to the extent that the aggregate fair market value of the stock at the time of grant with respect to which incentive stock options are exercisable for the first time by the participant during any calendar year does not exceed $100,000. The purchase price of each share subject to an option will be not less than 100 percent of the fair market value of a share on the grant date (or, as to incentive stock options granted to a greater than 10% stockholder, 110% of the fair market value). No incentive stock options will be granted to any person who is not an employee of the Company or its subsidiaries. The terms and conditions of each option will be set forth in an award agreement.

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Stock Appreciation Rights. A “stock appreciation right” is the right to be paid an amount measured by the appreciation in the fair market value of a share from the date of grant to the date of exercise of the right, with payment to be made in cash and/or share(s). The exercise price for each share underlying the stock appreciation right will not be less than one hundred percent (100%) of the fair market value per underlying share on the grant date. The terms and conditions of each stock appreciation right will be set forth in an award agreement.

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Restricted Stock. A share of “restricted stock” is a share subject to certain restrictions and to a risk of forfeiture. The Board may, upon such terms and conditions as it determines, provide that a certificate or certificates representing the shares underlying a restricted stock award will be registered in the participant’s name and bear an appropriate legend specifying that such shares are not transferable, or that such certificate or certificates will be held in escrow by the Company on behalf of the participant until such shares become vested or are forfeited. The terms and conditions of each award of restricted stock will be set forth in an award agreement.

•	Restricted Stock Units. A “restricted stock unit” (referred to as an “RSU”) is a right to receive shares or a cash payment equal to the fair market value of such shares at the end of a specified period which right may be subject to the attainment of performance goals or other terms and conditions as the Board will

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Other Stock-Based Awards and Cash-Based Awards. “Other stock-based award” means an award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, the common stock of the Company, including but not limited to performance units or dividend equivalents, each of which may be subject to the attainment of performance goals or a period of continued employment or other terms and conditions as permitted under the 2017 Plan. The terms and conditions of each other stock-based award will be set forth in an award agreement. “Cash-based award” means an award granted to a participant, including cash awarded as a bonus or upon the attainment of performance goals or otherwise as permitted under the 2017 Plan. The terms and conditions of a cash-based award may be set forth in an award agreement.

•	any profit or loss attributable to acquisitions or dispositions of stock or assets;

•	any changes in accounting standards or treatments that may be required or permitted by the Financial Accounting Standards Board or adopted by the Company or its subsidiaries after the goal is established;

•	all items of gain, loss, or expense for the year related to restructuring charges for the Company or its subsidiaries;

•	unusual or infrequently occurring items in accordance with generally accepted accounting principles;

•	gains or charges associated with discontinued operations or with the obtaining or losing control of a business;

•	the impact of capital expenditures;

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•	the impact of share repurchases and other changes in the number of outstanding shares;

•	goodwill and other impairment charges;

•	(1) all transaction costs directly related to acquisitions, (2) all restructuring charges directly related to acquisitions, (3) all charges and gains arising from the resolution of acquisition-related contingent liabilities identified as of the acquisition date, and (4) all other charges directly related to acquisitions;

•	the impact of any discrete income tax charges or benefits identified during the performance period (or during any period that the performance period is being compared to);

•

other objective income, expense, asset, liability and/or cash flow adjustments as may be consistent with the purposes of the performance goals set for the given performance period and specified by the Committee within the time permitted under Section 162(m), which may include adjustments that would cause one or more of the performance goals to be considered “non-GAAP financial measures” under rules promulgated by the Securities and Exchange Commission; and

•	such other items as may be permitted by Section 162(m).

•	Continuation/Assumption/Substitution of Awards. With respect to each outstanding award that is continued, assumed, or substituted in connection with a change in control (as defined in the 2017 Plan),

◦	upon the occurrence of a change in control, for awards that are subject to performance goals, (1) the performance goals will be deemed to be achieved at the target level of performance and (2) the awards will vest in full at the end of the applicable performance period, subject to the participant’s continued employment; and

◦	if within twenty-four (24) months following such change in control, a participant’s employment or service is terminated without cause or the participant resigns with good reason (as defined in the 2017 Plan), all of the participant’s outstanding equity awards which have not yet vested will immediately vest and become exercisable and all restrictions on such awards will immediately lapse.

•

No Continuation/Assumption/Substitution of Awards. With respect to each outstanding award that is not continued, assumed, or substituted in connection with a change in control, all of the participant’s outstanding equity awards which have not yet vested will immediately vest and become exercisable and all restrictions on such awards will immediately lapse (if applicable, assuming achievement at the target level of performance goals).

•	reprice (or cancel and regrant) any option, stock appreciation right, or other stock-based award at a lower exercise price;

•	take any other action (including by way of an amendment, cancellation, repurchase, or replacement grant) that has the effect of repricing an option, stock appreciation right, or other stock-based award at a lower exercise price;

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•	grant any option, stock appreciation right, or other stock-based award that contains a so-called “reload” feature under which additional options, stock appreciation rights, or other stock-based awards are granted automatically to the participant upon exercise of the original option, stock appreciation right, or other stock-based award; or

•

at any time when the exercise price of an option or the stock appreciation right is above the fair market value of a share of the Company’s common stock, cancel, exchange, buyout, or surrender outstanding options or stock appreciation rights in exchange for cash, other awards, or options or stock appreciation rights with an exercise price that is less than the exercise price of the original options or the stock appreciation right.

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•	the RSUs awarded under the 2017 Plan on March 1, 2017 to each of our named executive officers, our other executive officers as a group, and to our other eligible, non-executive officer employees as a group.

◦

Our named executive officers and other executive officers received four RSU grants: grant 1 is a grant of RSUs subject to a one-year performance period (2017) based on a measure of earnings and a four-year vesting schedule pursuant to which 25% of the grant vests on each of the first four anniversaries of the grant date; and grants 2 through 4 are grants of RSUs subject to a one-year performance period (2017) based on a measure of earnings and a three-year performance period (2017-2019) that commences on the same date (based on an additional measure of earnings for grant 2, a measure of return on invested capital for grant 3, and certain customer satisfaction indices for grant 4), which cliff vest following the three-year performance period based on actual performance. The eligible, non-executive officer employees received grants of RSUs subject to a four-year vesting schedule pursuant to which 25% of the award vests on each of the first four anniversaries of the grant date.

•	the 2017 target annual incentive award (assuming the achievement of target level of performance) for each of our named executive officers and for our other executive officers as a group.

◦

The 2017 annual incentive awards are based on a percentage of the participant’s base salary (which percentage varies among the participants) and will be determined based upon the achievement of the performance goal established for 2017. See “Compensation Discussion and Analysis - 2017 Executive Compensation Decisions.” Our other eligible, non-executive officer employees received annual incentive awards for 2017 under our AOP Plan, not the 2017 Plan.

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(1)	Based on the $46.61 closing price of the common stock on the New York Stock Exchange on March 1, 2017, the date of grant. Each RSU was granted with dividend equivalent rights.

(1)

Includes 2,458,044 shares that were available under the 2008 Plan and 876,669 shares that were available under the 2014 Director Plan as of December 31, 2016. On January 31, 2017, the Board discontinued the 2008 Plan and approved the 2017 Plan, in each case subject to stockholder approval of the 2017 Plan at our Annual Meeting. In addition, on January 31, 2017, the Board amended the 2014 Director Plan to reduce the number of shares available for issuance thereunder by 400,000.

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(1)

As noted above, the Board approved a reduction of 400,000 shares from the 2014 Director Plan effective as of January 31, 2017, and such reduction is not contingent on stockholder approval of the 2017 Plan. In addition, on January 3, 2017, each of our non-employee directors received a grant of 5,073 vested RSUs under the 2014 Director Plan pursuant to our non-employee director annual equity award program.

(2)	In January 2017, awards representing a total of 1,362 shares of restricted stock were cancelled, and such shares became available again for awards under the 2008 Plan.

(3)	The number of shares of common stock that may be issued pursuant to awards granted under the 2017 Plan may not exceed in the aggregate 5,500,000 shares, subject to certain equitable adjustments as provided in the 2017 Plan. On March 1, 2017, the Compensation Committee approved the grant of a total of 638,466 RSUs under the 2017 Plan to eligible employees. See the “New Plan Benefits” table above.

•	5,042,976 stock options outstanding, with a weighted-average exercise price of $47.30 and a weighted-average remaining contractual term of 6.53 years;

•	265,544 shares of restricted stock outstanding; and

•	144,729 restricted stock units outstanding.

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1.	PURPOSE

2.	ADMINISTRATION

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(i)

In the event that the Plan, any Award granted, or Award Agreement entered into hereunder provides for any action to be taken by or determination to be made by the Board, such action may be taken by or such determination may be made by the Committee if the power and authority to do so has been delegated to the Committee by the Board as provided for in Section 2(b) above. Unless otherwise expressly determined by the Board, any such action or determination by the Committee shall be final and conclusive. To the extent the Board has delegated to the Committee the administration of the Plan, where applicable references herein to the Board shall be deemed to refer to the Committee.

(ii)	The Board or the Committee may also delegate to such officers of the Company as it deems appropriate the authority to administer the Plan in whole or in part (but, not the authority to grant any Awards).

3.	STOCK

4.	ELIGIBILITY

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5.	EFFECTIVE DATE AND TERM OF THE PLAN

6.	GRANT OF AWARDS

7.	LIMITATION ON INCENTIVE STOCK OPTIONS

8.	AWARD AGREEMENTS

9.	OPTIONS AND STOCK APPRECIATION RIGHTS

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10.	RESTRICTED STOCK, RESTRICTED STOCK UNITS AND OTHER STOCK-BASED OR CASH-BASED AWARDS

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11.	CHANGE IN CONTROL

(i)

Upon the occurrence of a Change in Control, with respect to Awards that are subject to Performance Goals at the time of the Change in Control, (1) the Performance Goals shall be deemed to be achieved at the target level of performance and (2) such Awards shall vest in full at the end of the applicable Performance Period provided the Participant is employed by or is providing services to the Company, its successor or affiliate on such date, subject to the terms of this Section 11, including Section 11(a)(ii)(2) below; and

(ii)	In the event of a termination of employment or other service of a Participant by the Company, its successor or affiliate thereof without Cause or the resignation of the Participant with Good Reason, in either case, within twenty-four (24) months following such Change in Control, then:

(1)	Any Award (or substitute award) that is an Option or Stock Appreciation Right shall become immediately exercisable in full;

(2)

Any restriction periods and restrictions imposed on any such Award (or substitute award) that is a Restricted Stock Award, Restricted Stock Unit, Other Stock-Based Award or Cash-Based Award (including any such restriction periods and restrictions imposed under clause (i) above) shall lapse and such Award (or substitute award) shall be settled as soon a reasonably practicable, but in no event later than ten (10) days following such termination of employment or service the Participant; and

(3)

Notwithstanding anything to the contrary, if the Change in Control event does not constitute a change in ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company under Section 409A of the Code, and if the Company determines that any Award (or substitute award) constitutes deferred compensation subject to Section 409A of the Code, then the vesting of such Award (or substitute award) shall be accelerated as of the date of the termination of employment or service of the Participant, but the Company shall pay such Award (or substitute award) on its scheduled payment date or on such earlier date as will not result the imposition of tax under Section 409A of the Code).

(i)	Any Award that is an Option or Stock Appreciation Right shall become immediately exercisable such that the shares acquired thereunder can be treated in the Change in Control in the same manner as all other shares of Stock;

(ii)

Any restriction periods and restrictions imposed on any such Award that is a Restricted Stock Award, Restricted Stock Unit, Other Stock-Based Award or Cash-Based Award (if applicable, assuming achievement at the target level of Performance Goals) shall lapse upon the Change in Control and such Award shall be settled as soon a reasonably practicable, but in no event later than ten (10) days following the Change in Control and such that the shares acquired thereunder, if any, can be treated in the Change in Control in the same manner as all other shares of Stock; and

(iii)

Notwithstanding anything to the contrary, if the Change in Control event does not constitute a change in ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company under Section 409A of the Code, and if the Company determines that any Award constitutes deferred compensation subject to Section 409A of the Code, then the vesting of such Award shall be accelerated as of the date of the Change in Control, but the

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12.	TRANSFERABILITY OF AWARDS

13.	TERMINATION OF EMPLOYMENT OR SERVICE

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14.	RIGHTS IN THE EVENT OF DEATH, DISABILITY OR RETIREMENT

15.	USE OF PROCEEDS

16.	REQUIREMENTS OF LAW

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17.	AMENDMENT AND TERMINATION OF THE PLAN

18.	EFFECT OF CHANGES IN CAPITALIZATION

19.	DISCLAIMER OF RIGHTS

20.	NON-EXCLUSIVITY OF THE PLAN

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21.	WITHHOLDING

22.	SECTION 409A

23.	CLAWBACK

24.	DEFINITIONS

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(i)

any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a merger or consolidation of the Company or any direct or indirect subsidiary of the Company that is not a Change in Control under clause (iii) below;

(ii)

the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended;

(iii)

there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation or other entity, other than a merger or consolidation (a) immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of (1) any parent of the Company or the entity surviving such merger or consolidation or (2) if there is no such parent, of the Company or such surviving entity and (b) which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) more than 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, and in which no Person acquires 50% or more of the combined voting power of the securities of the Company or such surviving entity or parent thereof outstanding immediately after such merger or consolidation; or

(iv)

the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets immediately following which (a) the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of (1) any parent of the entity to which such assets are sold or disposed or (2) if there is no such parent, of such entity and (b) the voting securities of the Company outstanding immediately prior to such sale or disposition continue to represent (either by remaining outstanding or by being converted into voting securities of the acquiring entity or any parent thereof) more than 50% of the combined voting power of the securities of the entity acquiring such assets or any parent thereof outstanding immediately after such sale or disposition.

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(i)	the assignment to the Participant of any duties inconsistent with the Participant’s status or a substantial adverse alteration in the nature or status of the Participant’s responsibilities, including, without limitation, if the Participant was an executive officer of a public company, the Participant ceasing to be an executive officer of a public company;

(ii)	a reduction by the Company in the Participant’s annual base salary;

(iii)	the relocation of the Participant’s principal place of employment by more than 50 miles or the Company’s requiring the Participant to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with the Participant’s previous business travel obligations;

(iv)	the failure by the Company to pay to the Participant any portion of the Participant’s current compensation or to pay to the Participant any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven (7) days of the date such compensation is due; or

(v)

the failure by the Company to continue in effect any compensation plan in which the Participant participates which is material to the Participant’s total compensation, including but not limited to the Company’s equity-based long term incentive plans and annual incentive plans, unless a comparable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or an adverse change in the Participant’s participation therein (or in such substitute or alternative plan) either in terms of the amount or timing of payment of benefits provided or the level of the Participant’s participation relative to other participants.

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